Selling "in a panic" is the exact opposite of how an uncorrelated hedge works.
Even though gold fell 30% during the 6 month liquidity crisis, the asset still went from approximately $650 in 2006 to over $1800 in 2011. Why? Because people ran to gold when they feared that the United States would default on debt, that the US monetary policy measures were a bad idea, and/or that inflation was rising. Simply, gold served as a store of value and safe haven asset over the full timeline of the crisis, but it succumbed to the liquidity crisis during the worst 6 months.
Bitcoin has a liquid market, so many people who are holding it will sell it for cash because they need liquidity. In fact, most of them have already sold the asset over the last week, which is why we have seen such a significant drop in Bitcoin’s price. The weak hands and/or those seeking liquidity have most likely acted already, so it is unlikely that we will see continued sell offs that cause massive price decreases from these levels. (approximately $8500 AUD as of this writing).
This doesn’t guarantee that Bitcoin’s price won’t go lower for a short period of time, but it does mean that most of the people who want liquidity have likely already sold. This then brings us to the next stage in how this crisis probably plays out — holders of last resort and the safe haven status.
Don't mistake smooth sailing for good sailing. Bitcoin is still alive and kicking, and that is a feat in itself. We are witnessing a new asset class emerge.
